FX Daily

The report highlights the continued resilience of the USD as a safe-haven and high-yielding currency driven by the 'USD smile'. Meanwhile, Australia faces weakening consumer confidence and growing political uncertainty that could impact the RBA's policy path.

Key Takeaways

• 1.The 'USD smile' remains a primary driver, with the USD benefitting from both risk aversion and higher US rates.
• 2.Australian consumer confidence is weakening due to rising living costs, putting less pressure on the RBA to hike rates.
• 3.Increased political uncertainty in Australia, driven by the rise of the One Nation party, is becoming a new area for investor focus.

Table of Contents

• Asia overnight
• USD: all smiles
• AUD: lacking confidence
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• Key events
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